Thursday, August 14, 2014

The other Obamacare shoe is about to drop. Folks who applied for (and received) taxpayer

funded subsidies will soon come out of the ether and realize there are no free lunches.

If consumers thought logging on to HealthCare.gov was a headache, sorting through complex forms ahead of tax deadline day 2015 is their next big Obamacare challenge.

That means much new paper-shuffling between now and April 15, which could be especially confusing for low- and middle-income Americans unaccustomed to lots of reporting to the IRS. The insurance exchanges and employers must send consumers details about their health plan and benefits or exemptions in time for them to file a tax return. If any of that information is delayed or wrong, tax refunds could be delayed.

PoliticoAccording to some reports, about 300,000 Obamacare enrollees have until September 1 to prove they are legal residents or else lose their subsidy.Soon others will receive inquiry letters from the IRS if their estimated 2014 income varied by more than 10% vs. prior years. In other words, if you understated your income to qualify for a larger subsidy you will probably have to Google the word "clawback".

At this point, the new forms look “very daunting” for taxpayers, said Mark Ciaramitaro, vice president of health care services at H&R Block. “Overall, we expect the complexity level is just going to go up for a significant group of moderate- to low-income people, whether they got insurance through the marketplace or they didn’t.”

Before they can file a tax return, individuals will have to get documents from their state- or federal-run exchange about the plan they bought and any subsidies they received. Or, if they’re covered through an employer, they’ll have to provide proof of that. If they qualify for an exemption from having coverage, they’ll have to send that to the IRS, too.

The other Obamacare shoe is about to drop. Folks who applied for (and received) taxpayer

funded subsidies will soon come out of the ether and realize there are no free lunches.

If consumers thought logging on to HealthCare.gov was a headache, sorting through complex forms ahead of tax deadline day 2015 is their next big Obamacare challenge.

That means much new paper-shuffling between now and April 15, which could be especially confusing for low- and middle-income Americans unaccustomed to lots of reporting to the IRS. The insurance exchanges and employers must send consumers details about their health plan and benefits or exemptions in time for them to file a tax return. If any of that information is delayed or wrong, tax refunds could be delayed.

PoliticoAccording to some reports, about 300,000 Obamacare enrollees have until September 1 to prove they are legal residents or else lose their subsidy.Soon others will receive inquiry letters from the IRS if their estimated 2014 income varied by more than 10% vs. prior years. In other words, if you understated your income to qualify for a larger subsidy you will probably have to Google the word "clawback".

At this point, the new forms look “very daunting” for taxpayers, said Mark Ciaramitaro, vice president of health care services at H&R Block. “Overall, we expect the complexity level is just going to go up for a significant group of moderate- to low-income people, whether they got insurance through the marketplace or they didn’t.”

Before they can file a tax return, individuals will have to get documents from their state- or federal-run exchange about the plan they bought and any subsidies they received. Or, if they’re covered through an employer, they’ll have to provide proof of that. If they qualify for an exemption from having coverage, they’ll have to send that to the IRS, too.